England and Wales High Court (Administrative Court) Decisions

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Cite as: [2001] EWHC Admin 696

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R (BATEMAN and BATEMAN) v LEGAL SERVICES COMMISSION [2001] EWHC Admin 696 (10th September, 2001)

Neutral Citation Number: [2001] EWHC Admin No 682
IN THE HIGH COURT OF JUSTICE CO/433/2000
QUEEN'S BENCH DIVISION CO/434/2000
ADMINISTRATIVE COURT
MR JUSTICE MUNBY
Royal Courts of Justice
Strand
London
WC2A 2LL

Monday 10th September 2001

Before
MR JUSTICE MUNBY
- - - - - - - - - - - - -
R (BATEMAN and BATEMAN)
v
LEGAL SERVICES COMMISSION
- - - - - - - - - - - - -
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - -
Mr Colin Ross-Munro QC appeared on behalf of Mrs Bateman
Mr Jonathan Brettler appeared on behalf of Mr Bateman
Mr Jonathan Harvie QC and Ms Julia Ellins appeared on behalf of the Commission
- - - - - - - - - - - - -
Judgment
As Approved by the Court
Crown Copyright ©

10 September 2001
MR JUSTICE MUNBY

1 These are separate applications for judicial review by Teresa Kim Bateman (CO/433/2000) and her husband Terence Henry Bateman (CO/434/2000) to quash decisions of the Birmingham Area Committee ("the Committee") of the Legal Aid Board, now the Legal Services Commission ("the Board"). The decisions were contained in a single decision letter dated 10 November 1999 ("the Decision Letter"). The Committee's decision in each case was to uphold the decision which had been taken in July 1999 to revoke various legal aid certificates that had previously granted, some to Mrs Bateman and some to her husband. The relevant certificates are listed in the Decision Letter.

2 In each case the application for permission to apply for judicial review was refused by Collins J on 13 March 2000 who observed that "This was perhaps a harsh decision, but there is no error of law." On renewed applications Tucker J on 9 May 2000 granted both applicants permission. The substantive applications came on for hearing before me on 21 and 22 June 2001. Mrs Bateman was represented by Mr Colin Ross-Munro QC and Mr Bateman by Mr Jonathan Brettler of counsel. The Board was represented by Mr Jonathan Harvie QC and Ms Julia Ellins of counsel. I am grateful to all of them for the very great assistance they have given me.
The facts

3 In the light of the way in which the case developed in front of me I must set out the material facts in some detail.

4 Mr and Mrs Bateman were involved in various pieces of litigation the details of which do not matter for present purposes. Each sought legal aid. At that time they were in receipt of a form of benefit called Jobseeker's Allowance which for legal aid purposes qualified as a "passported benefit". An applicant for legal aid in receipt of a "passported benefit" is not subject to independent means-testing for the purpose of his or her legal aid application.

5 On 8 October 1997 Mrs Bateman completed the appropriate Financial Application Form for the Board on the Board's printed form CLA 4B. She put her signature to a Declaration which included the following:
"I understand that I must tell you immediately if there are any changes in my or my partner's financial circumstances.
I understand that I must tell you immediately if my or my partner's Income Support or income-based Jobseeker's Allowance stops.
I understand that I must co-operate fully and immediately with any enquiry into my financial circumstances by the Benefits Agency or the Legal Aid Board and that, if I do not, any legal aid certificate granted to me may be revoked (cancelled) at which point I will become liable to pay all the legal costs that have been incurred."

6 On 14 May 1998 Mr Bateman signed a similar form (by then on the Board's printed form MEANS 2) containing so far as material for present purposes precisely the same declarations. Various legal aid certificates were subsequently granted to both of them.

7 On 18 September 1998 Mr and Mrs Bateman ceased to receive Jobseeker's Allowance. On 23 September 1998 Mr Bateman commenced employment with Crusader Trading Company Limited. The Board was not informed of either of these matters.

8 In November 1998 the Board received information to the effect that Mr and Mrs Bateman had significant assets and were running a car sales business from their home. On 18 November 1998 the Board sent Mr Bateman two letters. One indicated that the Board was considering revoking his legal aid certificates "for failing to disclose a material fact concerning your financial resources, namely that you are no longer in receipt of Job Seekers Allowance", and stated that "It is considered that you have not used due care and diligence to avoid such failure." The other invited Mr Bateman to complete by 2 December 1998 the Board's Reply To Show Cause form.

9 On 26 November 1998 Mr Bateman's solicitors wrote to the Board enclosing what they described as "our client's" Reply To Show Cause signed by Mr Bateman on 25 November 1998 together with a Statement of Earnings on the Board's printed form L 17 and the Board's completed MEANS 1 - the form used for means-tested legal aid - also signed by Mr Bateman.

10 It may be helpful to indicate at this point that the MEANS 1 includes on page 8 question 3 `Do you or your partner get any money from anywhere else?' and question 4 `Is anybody else, including any company or other body, supporting you or your partner financially or making resources available to either of you?' On page 9 there is a question about mortgage payments. It asks `How much do you or your partner actually pay for the mortgage ... ?' and `Who pays it?': the latter question is to be answered by ticking boxes marked `you' and `your partner'. On page 10 there are similar questions about the payment of Council Tax. Each of these questions is required to be answered both in relation to the applicant and in relation to his/her partner. On page 16 (sheet D2) there is a question `Do you have any other information or further details in addition to the above you feel are relevant to your application?'

11 Page 17 of MEANS 1 contains a Declaration which includes the following:
"I have given correct and complete information on this form and on any other accompanying form or documents.
I have given details of all my and my partner's income and capital assets held in the UK and in any other country, including income arising from capital and/or assets held abroad.
I understand that if the information I have provided is not correct and complete any legal aid certificate granted to me may be revoked i.e. cancelled at which point I will become liable to pay all the legal costs that have been incurred.
I understand that I must co-operate fully and immediately with any enquiry into my financial circumstances by the Legal Aid Board and that, if I do not, any legal aid certificate granted to me may be revoked i.e. cancelled at which point I will become liable to pay all the legal costs that have been incurred."

12 In the Reply To Show Cause Mr Bateman said:
"I felt that I should go back to work when offered a part-time job for an average 15 hours per week. My income is only £4000 & therefore, I didn't realise I needed to contact the legal aid board, because with an income this low I didn't think my entitlement to legal aid would be affected. I can't work full time, because I am spending so much time defending the various actions brought against me."

13 In answer to question 3 on page 8 of the MEANS 1 Mr Bateman answered No in relation to both himself and Mrs Bateman. In answer to question 4 he said Yes in relation to himself and provided the information that the support was from "relatives" who "assist with bills when necessary". He said that in the last 12 months the support had amounted to "approx £600" and in the previous 12 months to "approx £6000" and added "these funds are repayable when funds are available". In answer to the question on page 10 he said that he paid the Council Tax of £600. Page 16 (D2) was left blank. Mr Bateman signed the Declaration on page 17.

14 As Mr Harvie points out, Mrs Bateman in her first witness statement, referring to this MEANS 1, said:
"I did not complete a means 1 form for the LAB as the information contained in my husband's Means 1 application included all the information required not only for my husband but also for myself."

15 On 27 November 1998 the Board wrote to Mr Bateman saying that, having considered the reply received, it had been decided that his legal aid certificate should remain in force.

16 On 2 December 1998 the Board wrote to Mr Bateman enclosing new means assessment forms which it required him to complete by 23 December 1998. The letter referred to the Board having been informed of "a change in your financial circumstances."

17 On 14 December 1998 different solicitors acting for Mrs Bateman wrote to the Board as follows:
"We have been informed by our client that there has been a change in her financial circumstances. Please note that our client is no longer receiving job seeker's allowance and her husband ... is now in receipt of approximately £4,000 per annum from part time income. Our client is still unemployed and is a full time housewife caring for four children."
I interpolate to add that her four children are a daughter born on 28 June 1993, a son born on 15 January 1995 and twin sons born on 13 August 1996.

18 On 7 January 1999 Mrs Bateman signed a completed MEANS 1 which was returned to the Board under cover of a letter from her solicitors dated 15 January 1999. In answer to a question on page 3 of the form she said that her husband's job had started on 28 October 1998. She answered question 3 on page 8 "Yes" in relation to both herself and her husband and added "see D2 extra information." In relation to each of them she answered question 4 "No". In answer to the question on page 9 she said that the mortgage payments were £1802 every month. She did not tick either box but added "see D2 extra". In answer to the questions on page 10 she said the Council Tax was £1460 paid by her partner but added "helped by relatives by way of loan".

19 On page 16 of the form (D2) she wrote:
"*Both relatives T K Bateman's parents P & K Jones and E Bateman support the family of T H and T K Bateman by way of loans, which at some point must be repaid: ...
*The financial support recieved [sic] is recieved as a result of the hardship caused to us by the actions of Barclays Bank PLC."
She signed the Declaration on page 17. Included in an appendix to the MEANS 1 were bank statements relating to what it is common ground was a joint bank account in the names of Mr and Mrs Bateman.

20 On 15 January 1999, though there is nothing to show that at this stage Mr and Mrs Bateman were aware of this fact, their cases were referred to the Board's Special Investigations Unit ("SIU").

21 On 3 February 1999 Mrs Bateman signed and returned to the Board another completed MEANS 1. She answered question 3 on page 8 "Yes" in relation to herself, not ticking either box in relation to her husband. She added "as per correspondence enclosed see D2." In relation to each of them she answered "No" to question 4. In answer to the question on page 9 she said that the mortgage payments were £1604 every month. She did not tick either box but added "see D2". In answer to the questions on page 10 she said the Council Tax was £1460. She did not tick either box but added "see D2".

22 On page 16 of the form (D2) she wrote:
"P 10 Para 9. Has been paid by relatives to date within the £40,000 loan total. ... A letter sent by Mr T H Bateman is self explanatory as to our means. ... Our families are supporting us by way of loans because of the children."
She signed the Declaration on page 17.

23 Mrs Bateman's references to "correspondence" and a "letter" are, as I understand it, references respectively to a letter from Mrs Bateman dated 3 February 1999 and a letter from Mr Bateman dated 4 February 1999 in the form of a Schedule of Income and Expenditure. In her letter Mrs Bateman said, amongst other things,
"I do not have any involvement in my father's business Crusader Trading Company. My father has endorsed this letter confirming that my family has loaned in excess of £40,000 over the past two years, to support our four children all under 5½ years and bare living expenses."
Mr Bateman's Schedule showed his monthly income as including his monthly salary of £333 and what was called a `family loan' of £2,200 monthly.

24 On 10 February 1999 the Board sent Mrs Bateman a Notice to Show Cause. It sought certain specific information including:
"Please detail specifically ALL financial support received from friends & family in the LAST 12 MONTHS TO DATE, indicating the originators/dates/amounts."

25 Mr and Mrs Bateman responded with a letter to the Board dated 10 March 1999 which included the following information:
"Finance support received within last 12 months
Reg Orme £6000
Ronald Wedgbury £6500
Peter Ackers £5500
Phil & Kath Jones £9928."
Those figures come to £27,928 in total.

26 Enclosed with that letter were copies of letters, each dated 20 February 1999, from Mr Bateman's mother, Mrs E Bateman, from Mrs Bateman's parents, Mr and Mrs Jones, from her uncle, Mr Orme, and from two people who each described Mr and Mrs Bateman as "good friends", Mr Wedgbury and Mr Ackers. Mrs E Bateman said she had loaned £8000 over a period of two years, Mr and Mrs Jones that they had loaned "to the order of £12,000 cash since December 1996." Both described their loans as "repayable as and when finances become available" and said that they would "continue to support them on the above arrangements" funds permitting. Mr Orme said that he had provided £6000 per year since December 1996 and would continue to do so "in the anticipation that their law suites [sic] succeed"; the loans he said were "repayable as soon as possible." Mr Wedgbury and Mr Ackers, in identical letters, each said they had loaned £12,000 (in the case of Mr Ackers approximately) and that they "expect to be paid as and when their finances improve". Again, each of them indicated a willingness, in principle, to "support" Mr and Mrs Bateman further. It will be noted that the total of the loans from Mr and Mrs Bateman's relatives amounted to £32,000 which, together with the further £24,000 from friends, comes to a grand total of £56,000 in the period since December 1996.

27 On 26 May 1999 the SIU communicated its findings and recommendations to the Board.

28 On 3 June 1999 the Board wrote to Mr and Mrs Bateman requiring them to show cause within 14 days why their legal aid certificates should not be revoked. Amongst the matters referred to by the Board was an alleged failure to disclose what was described as an income stream derived from a Scottish Provident insurance policy which had matured on 20 July 1997. Mr Bateman sent the Board an undated memorandum on, I am told, 22 June 1999 in the course of which he said:
"My wife has 4 children under 6 years of age to look after and does not get involved in family finances. Previously financial matters were dealt with by qualified accountants, financial advisers.
The policy in question was raised in 1989 by Keith Wallace our financial adviser through Route Four Limited. When Route Four Limited went into receivership the policy ceased being paid. I was unaware there was a payment. It was not until SIU requested further information on the £56 per month that I contacted the Nat West branch at Shirley who advised me who was paying the instalments. I contacted the insurance company who advised me that they had been crediting our account from 20 July 1997.
As I only ever looked at the balance on this account I had not become aware of the credits. If I had realised the monthly credit I would have notified the Legal Aid Board. I apologise for none [sic] disclosure, however, it would not have precluded me from obtaining Legal Aid. The Legal Aid Board was notified when I became aware of the policy."

29 Mrs Bateman replied by a letter dated 23 June 1999 in the course of which she said:
"I am a little bewildered by your comment. "No notification of passported benefit was made ...." My husband submitted an L17 in November 1998 and you yourselves returned it to him. This specifically informed the Legal Aid Board that my husband was at that time being employed. You were also aware that my husband made his services available to a company called Asgard with no remittance received whatsoever. You were then clearly made aware again in January 1999 that indeed my husband was employed and that the cessation of JSA was September 1998. ...
Surely coming off JSA is what the government encourages everyone to do. My husband and I had less money by him being employed instead of staying on JSA. We were receiving approximately £1,000 in JSA as opposed to £330 by being employed. (A saving to the tax payer). We both felt that the integrity of being employed far outweighed the humiliation to ask for JSA."

30 On 5 July 1999 the SIU, having considered this further material, communicated its recommendations to the Board. The legal aid certificates, as I have said, were revoked later that same month.

31 On 26 July 1999 Mrs Bateman and the next day Mr Bateman gave notice of appeal. Their appeals were heard and determined on 9 November 1999. Both Mr and Mrs Bateman were present. Mr Bateman was represented by counsel, Mr Brettler. Mrs Bateman was represented by her solicitor, Mr Omer Ghanti. The Decision Letter, as I have said, was dated 10 November 1999.

32 Mrs Bateman's application for judicial review is supported by her witness statements dated 8 February 2000 and 22 May 2001 and a witness statement by her solicitor, Mr Ghanti, dated 8 February 2000. Mr Bateman's application is supported by his witness statement also dated 8 February 2000. The Board's evidence in answer to both applications is contained in witness statements of Shirley Edna Thompson, who was the Chairperson of the Committee, dated 18 July 2000 and 2 October 2000, and a witness statement of Matthew Howgate, the in-house solicitor who now has conduct of the matter on behalf of the Board, dated 8 June 2001.
The Committee's reasons - the Decision Letter

33 The Decision Letter is not very long. It is convenient if I set it out verbatim. For ease of subsequent reference I have added paragraph numbers:
"I write with reference to the appeals lodged against the revocation of the above Legal Aid certificates. The appeals were refused by the Area Committee on 9 November 1999. Set out below are the detailed reasons for the refusal.
An appeal was also received against a certificate no 06019700580 which appears to pertain to a child care certificate issued to an extraneous party. This appeal was not considered by the Area Committee.
[1] It was argued on behalf of the Appellants that Regulation 78(a) of the Legal Aid (General) Regulations had no application to any statement made or failure to disclose after the grant of the certificate. The Area Committee rejected this submission as being contrary to any purposive interpretation and as contradicted by the clear wording of the regulation.
[2] With specific reference to the lack of notification of ceasing to claim passported benefit. Had the appellant voluntarily given the information rather than in response to the Legal Aid Boards' [sic] enquiries, the Committee would have been of the view that to revoke the certificates on this basis alone would have been harsh. However, because the information was not volunteered, the Committee were of the view that there had been non disclosure and that due care and diligence had not been exercised.
[3] With reference to the non disclosure of assets. The appellants accepted that the Jerrom Associates document was fraudulent. It was described by the Barrister representing Mr Bateman as "an unattractive document which reflects badly on Mr Bateman and does not enhance his credibility". However, the Area Committee agreed that the document did not disclose any assets unknown to the Board. The Committee also agreed that the the [sic] document did not reflect the credibility of Mrs Batemen [sic] in any way. The Committee upheld the representations made and would not have upheld the revocation on this ground alone.
[4] Re the Scottish Provident Insurance Policy. It was admitted that the appellants had been in receipt of annuity payment since 20/7/97. Payment was made to the National Westminster Bank, first to an account in Mr Batemens [sic] sole name and then to a joint account. The appellants claimed that they do not read their bank statements, except to look at the balance. The appellants owed a duty of care to complete the means forms correctly and failed to do this. Due care and diligence was not exercised by the appellants. The receipt of £56 per month is, in the opinion of the Area Committee, a material non disclosure particularly when considered in the light of the appellants financial circumstances at the time. When a receipt of that nature may have affected their entitlement to state benefits, it should have been disclosed to the Benefits Agency.
[5] Re the 2 Life Assurance Policies. Mr Bateman knew of these policies but did not know they were continuing. He took no steps to ascertain their current status. The appellants had gone into receivership. The Committee accepted the points put forward. The appellants were clearly of the opinion that these were life only policies and did not form part of the grounds for reassessment. The appeal on this point was upheld.
[6] Re non disclosure of financial Support. Counsel for Mr Bateman made the submission that Regulation 7A(1)(c) of the Legal Aid (Assessment of Resources) Regulations would not cover the loans made in these circumstances. He sought to draw the distinction between a loan and a gift. The Committee rejected this submission on the basis that both sections (1)(b) and 1(c) applied.
[7] The appellant had been in receipt of loans from his family during the lives of the certificates. There were no requirements to disclose these loans to the Board whilst the appellants were claiming Income Support Benefits. On ceasing to claim benefits, the appellants had a duty to disclose these loans in full. They failed to do this on the means form dated 25/11/98 and were economical with the information on the means 1 forms dated 7/1/99 & 3/2/99. Evidence of the extent of the loans did not come into the Boards possession until letters from the lenders were made available in late February 1999. Counsel argued that there had not been non disclosure because a) reference to the loans was made in the means form dated 7/1/99 & b) that a loan was not a resource that the assessor could take into account. The Committee considered that there had been material non disclosure on this point. In using the expression "maintaining" this refers to the financing at least in part of the proceedings and not to the maintenance in the general sense of the appellants.
Conclusions
[8] Taking all these matters into account, the Committee considered that the decisions to revoke all the certificates for both the appellants should be upheld. The representations detailed above were made on behalf of Mr Bateman. Separate representations were made on behalf of Mrs Bateman. The Committee considered that the duties rested with both the appellants and that Mrs Bateman could not be absolved from these duties simply by relying on information provided by the professionals/her Spouse dealing with these matters on her behalf."

34 I should explain the reference to what is called the Jerrom Associates document. That was a document, dated 28 October 1998, prepared on the headed note-paper of a firm of accountants and purportedly signed by Mr Bateman, Mrs Bateman and the firm, asserting that what was described as "an accurate financial Statement", showed Mr and Mrs Bateman as having total assets worth £1,230,000 and total liabilities of £200,000. It appears that the document had been prepared by Mr Bateman with a view to obtaining finance from those to whom it might be shown. The Committee, as paragraph [3] of the Decision Letter shows, accepted Mrs Bateman's assertion (repeated in her first witness statement) that she had nothing whatever to do with the document.
The grounds of challenge

35 Both Mr and Mrs Bateman rely upon the same formal grounds for relief. Their grounds are:
"Paragraph 2 of LAB Letter

1 The Legal Aid Board ("LAB") erred in law by determining that Mr and Mrs Bateman failed to disclose that they had ceased to claim Job Seekers Allowance. They disclosed this fact on the 25 November 1998.
Paragraph 4 of LAB Letter

2 The LAB erred in law by determining that Mr and Mrs Bateman had failed to disclose receipts of £56.00 per month from Scottish Provident. They disclosed the receipts by sending the LAB copies of their bank account statements, on which such receipts were recorded.

3 The LAB acted unreasonably in further determining that Mr and Mrs Bateman had failed to exercise due care or diligence in not expressly disclosing the aforesaid receipts.
Paragraph 6 of the LAB Letter

4 The LAB erred in law when it determined that loans made to Mr and Mrs Bateman by 3rd parties to cover mortgage and other expenses were material resources, for the purposes of the Civil Legal Aid (General) Regulations 1989 and the Civil Legal Aid (Assessment of Resources) Regulations 1989 .

5 The LAB erred in law when it determined that Mr and Mrs Bateman had failed to disclose the aforesaid loans: they did so on the 25 November 1998, the 7 January 1999 and the 3 February 1999.
Exercise of Discretion

6 The LAB failed to consider the exercise of its discretion not to revoke Mr and Mrs Bateman's legal aid certificate and in particular:

6.1 The LAB failed to consider whether, having regard to Mr and Mrs Bateman's financial and other circumstances, this was at worst a case of non-disclosure under Regulation 78(1)(a) and not a case of intentional failure to comply or knowingly making untrue statements under Regulations 78(1)(b) or (c) of the Civil Legal Aid (General) Regulations 1989.

6.2 The LAB failed to consider whether Mr and Mrs Bateman were in any event at all relevant times financially eligible for legal aid, even having regard to the financial resources allegedly not disclosed.

6.3 The LAB failed to consider the exercise of its discretion in the context of the sums at stake in the litigation, the cost of pursuing the litigation to Mr and Mrs Bateman and the importance of the litigation to them."

36 In relation to paragraph [2] of the Decision Letter - ground 1 - and paragraph [4] of the Decision Letter - grounds 2 and 3 - I should record what Mr and Mrs Bateman had to say in their evidence to this court. It will be recalled (see paragraph 19 above) that in January 1999 the Board had been sent various bank statements. Mr Bateman in paragraph 5 of his witness statement said:
"I do not wholly accept that I had not disclosed the receipt each month of £56.35 from Scottish Provident. I must admit that I did not overtly bring it to the attention of the Legal Aid Board but neither did I try to hide it from them; it was shown on bank statements that I submitted to the Board. The simple answer is, I did not know the money was being received. Like many people I do not check my own bank statements as often or as thoroughly as I should. I missed the payments into the account, and I had forgotten the policy that provided them: it was taken out about 10 years ago whilst I had a financial adviser who looked after all my insurance and financial dealings. So, by innocent omission I did not tell the Legal Aid Board of this income or capital."

37 Mrs Bateman in her second witness statement said this:
"Our Job Seekers allowances were paid into our joint account at the National Westminster Bank. I only used this account on very rare occasions. I never looked at the joint account bank statements (as opposed to my husband), not even to check the balances. I trusted my husband. He knew at this time that I was very worried both as to our financial and personal position. Because of this he did not tell me until shortly before he filled up his Means 1 form on the 25 November 1998:-
(a) that we had come off Job Seekers Allowance since the 18 September 1998
(2) that our Job Seekers allowance of approximately £1,000 a month was now replaced by his earnings of £330 a month.
(1)
It is correct that I signed a form on the 8 October 1997 that said that I had to tell the LAB immediately if we came off Job Seekers Allowance. However, I did not know that this had happened until November 1998, and then assumed that it was sufficient for my husband to inform the LAB which he did on the 25 November 1998."
She added that she never went to "sign on", her husband doing so on her behalf.

38 She also said this:
"The Scottish Provident Insurance policy was not my policy but that of my husband. It was taken out by him in 1989. I had and still have no recollection of this policy. I now understand that the £56.35 was paid into my husband's account monthly until in or about September 1997 and thereafter paid into a Joint Account which we had at the National Westminster Bank. As a mother of four children (now five) I have substantially relied upon and trusted my husband for all financial matters affecting the family. I only used the joint account on very rare occasions since 1997. I in fact never looked at the joint account statements (as opposed to my husband) not even to check the balances. I understand that these bank statements were disclosed to the Respondent in 1999. There was no question of my deliberately not disclosing the £56.35 to the LAB. I do not really feel that I lacked due care or diligence in failing to check our joint account (operated almost exclusively by my husband) in respect of payments made under a policy that was not mine and of whose existence I was unaware."
The Committee's reasons - the Chairperson's evidence

39 The Chairperson of the Committee, as I have said, was Ms Thompson. She is a solicitor. The other members of the Committee were Keith Vaughn, a barrister, and Stephen Cook, another solicitor. There are certain passages in Ms Thompson's evidence to which I should draw attention. In the light of certain comments made by Mrs Bateman in her first witness statement I refer first to what Ms Thompson said in paragraphs 22-25 of her first witness statement:
"At the beginning of the hearing I invited the representatives of the Applicant and her husband to consider whether there was any possibility of a conflict of interest arising out of the applications being heard together. The main reason why I raised this point was that one of the arguments advanced by the Applicant in her notice of appeal was that revocation had been based on a document showing assets which was never within her knowledge nor were its contents true. The Area Committee understood that this was a reference to the Jerrom Associates Financial Statement which appeared to have been signed by both the Applicant and her husband. Having studied the papers and considered the representations in the applicant's notice of appeal prior to the hearing the Area Committee considered that there was a potential conflict of interest between the Applicant and her husband. At the beginning of the hearing the Committee therefore invited the Applicant and her husband to have their appeals heard separately, one of them being adjourned to another Area Committee. This invitation was declined by the representatives on behalf of the Applicant and her husband who requested that the appeals be heard together.
At the hearing Mr Bateman's representative made it clear that Mr Bateman accepted sole responsibility for the production of that document and that it falsely exaggerated the assets of Mr Bateman and the Applicant. Mr Ghanti, on behalf of the Applicant, said that she had played no part in the production of the document and that she had been, until recently, unaware of its existence. The Area Committee accepted those representations.
As a result the Area Committee took the view, and made it clear to the Applicant, that this document was wholly irrelevant to her appeal. In other words no inference adverse to the Applicant would be drawn from the fact that her husband had chosen to create that document without her knowledge and had forged her signature on it. As Mr Bateman accepted full responsibility for the fabrication of that document the Area Committee considered that there was, in fact, no conflict between the Applicant and Mr Bateman and therefore agreed to their request to have their appeals heard together.
Throughout the hearing the approach of the Applicant's solicitor was to adopt the submissions of Counsel for Mr Bateman. However, despite this fact and despite the fact that the parties had requested to have their appeals heard together the Area Committee was most concerned to ensure that each case was considered individually on its merits."

40 In paragraph 30 of her first witness statement Ms Thompson made it clear that:
"the key factor was that neither the Applicant nor her husband had voluntarily provided this information. Disclosure had only been made in response to the Legal Aid Board's enquiries. Furthermore disclosure had not been made immediately in accordance with the Applicant's obligations and with the declaration that she signed in form CLA 4B."

41 She expanded on this in a passage in paragraph 41 of the same statement which, because it was subjected to searching criticism by Mr Ross-Munro, I should set out in full:
"The only disclosure made by the Applicant and her husband was as follows:

1 On his form signed on 25 November 1998, in answer to the question "Is anybody else, including any company or other body, supporting you or your partner financially or making resources available to either of you" the Applicant's husband answered "Relatives...assist with bills when necessary. Details of the value of such support over the last 3 years starting with the last 12 months was given as "approx £600; approx; £6000; nil - employed".

2 In her means 1 forms signed on 7 January 1999 and 3 February 1999 the Applicant answered "No" to the question "Is anybody else, including any company or other body, supporting you or your partner financially or making resources available to either of you?"

3 In the means 1 form dated 7 January 1999 the Applicant provided the following additional information: "Both relatives TK Bateman's parents P&K Jones and E Bateman support the family of TM&TK Bateman by way of loans, which at some point must be repaid.." No further detail was provided.

4 In her means 1 form signed and dated 3 February 1999 the following "extra information" was provided: "Our family has been living off credit cards (statements enclosed) most of which are at their limit you will see one has paid the other. A letter sent by Mr TH Bateman is self explanatory as to our means. ...Our families are supporting us by way of loans because of the children." No detail as to the amount of the loans was provided.

5 In fact, in late February, letters obtained by the SIU confirmed that substantial amounts had been provided to the Applicant and her husband by various individuals. These demonstrated that at least £56,000 had been loaned to the Applicant and her husband since December 1996."

42 She concluded in paragraph 43:
"Having considered the matters set out above we decided that details of the money given to the Applicant and her husband had not been disclosed fully and timeously to the Board."

43 Ms Thompson explained in paragraphs 45 and 46 how the Committee had exercised its discretion. Again I should set out the relevant passage in full:
"In reaching the decision to revoke the Applicant's certificates the Area Committee carefully considered the submissions made on behalf of the Applicant and her husband. In exercising its discretion the Committee had regard to the importance of the litigation to the Applicant and her husband and its effect on their financial well-being. However in the Committee's view this was outweighed by the following factors:

1 There was not an isolated incident of non-disclosure. The Applicant and her husband had failed to make disclosure to the Legal Aid Board in a number of different respects: Job Seekers Allowance, the Scottish Provident receipts and the loans from family and friends.

2 Where disclosure had been made it had only been made after an investigation was instigated by the SIU. Even then, disclosure was incomplete, late and piecemeal.

3 The Committee considered that the obligations of the Applicant and her husband in relation to disclosure were clear and that their failure to disclose information was not excusable on the basis that they were (so they alleged) in any event financially eligible for legal aid. The effect of accepting such an argument would be that the Applicant and her husband were able to determine whether their own legal aid should continue by deciding what, if anything, needed to be disclosed.
As I have indicated above the purpose of Regulation 78 is the prevention of abuse of the Legal Aid system. The Legal Aid Board must be entitled to rely upon information which is provided to it. The Applicant had, in relation to a number of different matters, provided information to the Legal Aid Board which was unreliable and incomplete. It is essential that the Board can be confident that it has been given the full picture of an individual's financial resources. Despite being given several chances upon which to be open in relation to this information, the Applicant did not provide it. Revocation was clearly the appropriate sanction in the circumstances."

44 There are two passages in Ms Thompson's second witness statement to which I should refer. In paragraph 6 she said this:
"The Area Committee did not decide that Mr Bateman's certificate should be revoked because he failed to notify a diminution in income. The crucial fact was that he had failed to notify the Legal Aid Board that he was no longer in receipt of Job Seeker's Allowance. This information was highly material as it meant that he would be subject to a means assessment in order to determine whether he should receive legal aid. Furthermore the obligation to disclose this fact immediately was expressly spelt out in the form CLA B4."

45 Finally in paragraphs 9 and 10 she said this:
"The failure to disclose the Scottish Provident receipts was considered, in the exercise of our discretion, as part of a broader picture which showed that Mr and Mrs Bateman had failed to make disclosure to the Legal Aid Board in a number of different respects. We first made findings as to non-disclosure in relation to each individual incident, then considered the exercise of our discretion on the basis of those findings taken together. As I have indicated in my statement made in opposition to Mrs Bateman's application, one of the key factors in the exercise of our discretion and our eventual decision to revoke was that this was not a case of an isolated incident of non-disclosure (see paragraph 45 of that statement).
The Committee considered the points outlined by counsel for the applicants. The Committee were very concerned by the number of undisclosed items and the apparent cavalier approach to the completion of means forms and the applicants suggestion that they could ignore or miss out information if it could be traced by the Board from some other source (i.e. bank statements). In respect of Mr Bateman the Committee also considered the questions of deliberate non-disclosure and, in view of the Jerome Associates letter, we did consider that we had reason to suspect dishonesty with regard to his position."
The legal framework

46 At the relevant time (the system has of course subsequently been very significantly altered) the legal aid system was regulated by the Legal Aid Act 1988 and the various regulations made thereunder. These included in particular the Civil Legal Aid (Assessment of Resources) Regulations 1989 , which I shall refer to as the Assessment Regulations, and the Civil Legal Aid (General) Regulations 1989 , which I shall refer to as the General Regulations.

47 So far as material for present purposes reg 7A(1) of the Assessment Regulations provides as follows:
"Where it appears to the assessment officer that:
(a) the person concerned has transferred any resources to another person,
(b) another person is or has been maintaining the person concerned in the proceedings to which the application relates or any other proceedings, or
(c) any of the resources of another person are or have been made available to the person concerned,
the assessment officer shall have power to treat all or any part of the resources of that other person as the resources of the person concerned."

48 Reg 11 of the Assessment Regulations provides:
"The person concerned shall forthwith inform the Area Director of any change in his financial circumstances which has occurred since the original assessment was made and which he has reason to believe might affect the terms on which the certificate was granted or its continuation."

49 "Person concerned" is defined by reg 3(1) of the Assessment Regulations as meaning:
"the person -
(1) whose disposable income and disposable capital are to be assessed or reassessed, or
(b) whose resources are to be treated as the resources of any other person under these Regulations."

50 Reg 78 of the General Regulations is in the following terms:
"(1) Subject to paragraph (2), the Area Director may revoke or discharge a certificate where, as a result of information which has come to his knowledge, whether by a reference from the court under regulation 68 or otherwise, it appears to the Area Director that the assisted person has -
(a) in relation to any application for a certificate (whether for the same or different proceedings), made an untrue statement as to his financial resources or has failed to disclose any material fact concerning them, whether the statement was made or the failure occurred before or after the issue of the certificate and not withstanding that it was made or occurred in relation to an application to another area office; or
(b) intentionally failed to comply with these Regulations by not furnishing to the Area Director or the solicitor any material information concerning any matter other than his financial resources; or
(c) knowingly made an untrue statement in furnishing such information.
(2) No certificate shall be revoked or discharged under paragraph (1) by reason of any such mis-statement or failure as is referred to in paragraph (1)(a) if the assisted person satisfies the Area Director that he used due care or diligence to avoid such mis-statement or failure."

51 The differences between revocation and discharge of a legal aid certificate, which are central to the issues in the present case, are well known. The effect of regs 83 and 84 of the General Regulations is that, whether a certificate is revoked or discharged, does not affect the ability of the assisted person's solicitor and counsel to look to the Board for payment of their fees. So far as concerns the assisted person, however, there are two fundamental distinctions between revocation and discharge.

52 The first is spelt out in reg 74(2) of the General Regulations:
"a person whose certificate is revoked shall be deemed never to have been an assisted person in relation to those proceedings except for the purposes of section 18 of the Act; and a person whose certificate is discharged shall, from the date of the discharge, cease to be an assisted person in the proceedings to which the certificate related."

53 The second, and in practical terms even more significant, difference appears from reg 86 of the General Regulations:
"(1) Where a certificate has been revoked-
(a) the Board shall have the right to recover from the person to whom the certificate was issued the costs paid or payable under regulation 84(b) less any amount received from him by way of contribution; and
(b) the solicitor who has acted under the certificate shall have the right to recover from that person the difference between the amount paid or payable out of the fund and the full amount of his solicitor and own client costs.
(2) Where a certificate has been discharged, the person to whom the certificate was issued shall remain liable for the payment of his contribution (if any) as determined or redetermined, up to the amount paid or payable by the Board under regulation 84(b) and, where he continues to take, defend or be a party to the proceedings to which the certificate related, section 17(1) of the Act shall apply in so far as the costs were incurred while he was an assisted person."

54 Mr Ross-Munro submits that revocation, in contrast to discharge, is a draconian power. I was told that in the case of Mr Bateman the Committee's decision, if it stands, will leave him exposed to repaying the Board some £47,000. In the case of Mrs Bateman the figure is apparently some £80,000. It was asserted that the consequence will be bankruptcy. The amounts are substantial. The stakes are high.

55 The obligations which an applicant for legal aid owes to the Board have been considered in a number of authorities to which counsel drew my attention. The first in point of time is the unreported decision of Collins J in R v Legal Aid Board ex p Doran (1996) July 3. Apropos reg 78(1)(a) he said (Transcript p 22C-F):
"materiality does not depend necessarily upon whether, as a matter of fact in any given case, the information would have made any difference, because it cannot be for the applicant to judge whether information is going to make a difference ... the mere fact that the information would not have made any difference cannot mean that it is not material within the meaning of regulation 78(1)."
He continued (Transcript p 26B-E):
"I have already indicated that, in my judgment, materiality does not depend and cannot depend upon whether the material in fact makes any difference. It seems to me that a fact is material for the purposes of regulation 78 if it is something which is capable of influencing the thinking of a reasonable legal aid official when assessing resources for the purposes of the grant or refusal of legal aid. That has to be judged objectively. It is not what the applicant believes to be material or even believes to be capable of being material".

56 Collins J also observed that the absence of the word "intentionally" or "knowingly" in reg 78(1)(a) was significant, contrasting it with the inclusion of those terms in paragraphs (b) and (c) respectively. He said (Transcript p 26H):
"Mr Herberg reminded me that there might well be a case where a totally honest applicant had failed to disclose something because perhaps he had overlooked it, or perhaps he had genuinely believed that it was not something which he needed to disclose but in fact it represented a substantial sum of money which took him outside the limits for legal aid. Mr Herberg says in such a case clearly there must be a power to revoke because it would be quite wrong that the public should have to finance a case when the applicant in reality was perfectly able to pay for it himself. Therefore revocation and/or discharge under regulation 78 does not necessarily require there to be any particular fault or blameworthiness on the applicant. I think that is probably right."
As against that, as Mr Harvie points out, the due care and diligence defence in reg 78(2) provides protection for honest and reasonable errors and omissions.

57 Collins J's approach as set out in the passages in Doran  to which I have referred was followed by Laws J in another unreported case R v Legal Aid Area Committee ex p Parsons (1997) November 17. Laws J added (Transcript p 10D):
"I consider that the relationship between an applicant for legal aid and the Legal Aid Board is such that the former, when he makes his application, owes a duty of the utmost good faith to the latter."

58 The Court of Appeal dismissed an appeal against Laws J's decision: R v Legal Aid Board ex p Parsons [1999] 3 All ER 347. Mr Harvie correctly distilled from the central passage in Beldam LJ's judgment at pp 353b-354b the following key propositions:
« The relationship between an applicant for legal aid and the Board is one which requires the utmost good faith on the part of the applicant. The Board is being asked to underwrite the costs of litigation on behalf of the applicant. It is dependant upon the applicant making full disclosure of all his assets.
« The position of the Board is comparable to that of an insurance company induced to underwrite a risk when there has been a failure on the part of the insured to disclose a matter which would influence the mind of the prudent underwriter in deciding whether to underwrite the risk, and if so, on what terms.
« The terms of reg 78 indicate that the powers exercisable by the area director are intended to be available in cases in which the material non-disclosure is due to a negligent as well as an intentional failure to make proper disclosure.
« If an applicant fails to make full disclosure in a material respect, revocation may well be more appropriate than discharge. This action is not correctly described as punitive, although the Board will wish to emphasise the importance of full disclosure and their action is designed to underline the duty on those who apply for legal aid.
« It is not the function of the court to substitute a view of its own on the appropriateness of revocation or discharge. Unless the committee's decision can be attacked as unreasonable on ordinary public law grounds, the court should not interfere with it.

59 The third authority is the decision of Elias J in R v Legal Aid Appeal Committee ex p McCormick  [2000] 1 WLR 1804. This is an important case on which all the counsel before me relied. Having referred at pp 1808H-1810B to what had earlier been said by Collins J, Laws J and Beldam LJ, and having referred at pp 1810B-1811B to the significance of reg 11 of the Assessment Regulations, Elias J continued at p 1811B:
"It seems to me that the legal aid scheme should be assumed to be structured in a way which is internally self-consistent. It would be bizarre, as well as being grossly unfair, to specify with particularity the circumstances in which an assisted person should report a change in his or her financial position, as regulation 11 of the Assessment Regulations does, and yet penalise that person under regulation 78 of the General Regulations even although the assisted person has done precisely what regulation 11 of the Assessment Regulations requires. Accordingly, on this approach to the construction issue, the duty to inform the board of a change in circumstances will arise whenever the applicant has reason to believe that the change might affect either the continuation of his certificate or the terms on which it would be continued. To link this to the language of regulation 78 of the General Regulations, a fact will be material within the meaning of that provision whenever the applicant has reason to believe that it might affect - not would affect - either his eligibility or his level of contributions. ... it is enough that the assisted person has reason to believe that it might make a difference, not that it necessarily would do so. The test will be an objective one; if objectively viewed there is reason to believe that the information might make a difference, then it must be disclosed even although the applicant may not appreciate that fact. It seems to me that this provides a sensible principle for determining when an assisted litigant should be required to provide information of changed circumstances. Moreover, I do not consider that it is inconsistent with the duty of good faith referred to by Beldam LJ in R v Legal Aid Board ex p Parsons [1999] 3 All ER 347. It is true that it imposes a narrower duty than the board seeks to impose in the documents it issues, but in my opinion it is clear that the board cannot by its actions alter the meaning or effect of the statutory provisions."

60 That is the approach which I propose to adopt.

61 In McCormick  Elias J went on to indicate at p 1813G the appropriate approach for the Committee to adopt when considering what sanction to impose:
"In my opinion, in determining which sanction is appropriate it is highly relevant for the committee to consider the degree of culpability. In order to do this, it should ask itself whether the applicant has deliberately and dishonestly deceived the legal aid authorities by choosing to conceal information, or whether the failure to inform was an innocent, albeit negligent, oversight. In considering this question it may be relevant whether the applicant has personally benefited from the non-disclosure. Whilst there will plainly be cases where conduct short of the deliberate and deceitful withholding of information can justify revocation, as the decision of Beldam LJ in the Parsons case makes clear, it is in my opinion still important to bear in mind that the regulations have not considered revocation to be the appropriate sanction in every case where the duty to disclose has been infringed. Accordingly, in my view if the committee is going to revoke a certificate notwithstanding the lack of deliberate concealment, it should identify the factors which justify that step being taken."

62 He then at p 1814A considered the committee's approach in that case:
"In this case Mr Briden says in his affidavit that the committee concluded that the non-disclosure in this case was considered to be a serious non-disclosure, but the only factor expressly relied upon to justify that conclusion was the size of the loan. It is not clear either from the decision itself or the affidavit of Mr Briden whether the committee did indeed accept that the applicant had not deliberately sought to conceal the information. If they concluded that he had deliberately concealed it, or even that this was the only reasonable inference to draw given the size of the loan, then the decision to revoke is plainly justified. Similarly, if they considered that the fact that he had obtained the loan of itself suggested that his financial circumstances must be better than he had revealed (and there is some suggestion in Mr Briden's affidavit that they may have reasoned in that way) then that also might lead them, after appropriate further inquiries, to question the good faith of the applicant. If, however, they accepted his submission that there had been no intention deliberately to conceal the information, and that he had not benefited from the loan in any way, these are factors that ought to be put clearly in the balance in the applicant's favour when deciding which sanction is appropriate. In my judgment the committee cannot simply leave those issues in the air since their resolution in Mr McCormick's favour could be beneficial to him. At the very least they would need to make it plain that in their view, even if satisfied that the applicant's explanations were entirely truthful, they would still treat the failure to disclose as sufficiently serious to warrant revocation. I do not believe that they have done that in this case. It follows that the reasons given by the committee through Mr Briden raise serious doubts about whether they did take into consideration all potentially relevant factors when determining which sanction to impose. In particular, if they had accepted the applicant's explanation for the non-disclosure, or were prepared to assume in his favour that his explanation was true, then in my judgment they would have had to weigh those features on which he laid emphasis against their reason for treating the non-disclosure as being sufficiently serious to justify imposing the sanction of revocation. They do not appear to have done that."

63 He concluded with this observation at p 1814F:
"I am left with the uneasy suspicion that the committee may have harboured doubts about the veracity of the applicant's account and have been influenced, if only subliminally, by those factors. In my opinion fairness to the applicant required the committee to seek to resolve those issues. If the decision to impose revocation is based on a belief that there was a deliberate intention to mislead the authorities, then in my view that should have been made plain."
The applicants' submissions

64 Against this background I turn to consider the various submissions put forward on behalf of Mrs and/or Mr Bateman.

65 I deal first with a submission, developed primarily by Mr Brettler on behalf of Mr Bateman, that the Committee misconstrued both reg 78 of the General Regulations and regs 7A(1)(b) and (c) of the Assessment Regulations. The first of these contentions Mr Brettler put at the forefront of his submissions - he said it was a critical point - because, as he correctly said, if the Committee misconstrued reg 78 then its decision is plainly flawed. The fact, however, in my judgment, is that the Committee did not misconstrue reg 78. Mr Brettler's argument on the point is simply wrong.

66 Mr Brettler's argument is conveniently set out in his skeleton argument which I can summarise as follows. On the express wording of reg 78(1)(a), the applicant must make an untrue statement as to his financial resources or fail to disclose any material fact concerning them "in relation to any application for a certificate" . Once a certificate has been granted, there is no "application for a certificate" to speak of. Accordingly, if subsequent to the grant of his certificate(s), an applicant fails to notify a change in his financial circumstances reg 78(1)(a) does not apply.

67 Mr Brettler accepts, as he must, that reg 78(1)(a) bites on an untrue statement as to the assisted person's financial resources, or non-disclosure of a material fact concerning them, in relation to any application for a certificate and that the application need not relate to the proceedings to which the certificate in issue (as regards potential revocation/discharge) relates. So he accepts that the application involving an untrue statement as to the assisted person's financial resources, or non-disclosure of a material fact concerning them, may be one made after the issue of the certificate the revocation/discharge of which is being considered and indeed one made to a different area office from that considering discharge/revocation. So, as he also accepts, where an assisted person holds a number of certificates, the power of revocation/discharge will apply to all of them so long as he makes an untrue statement in relation to his application for at least one of those certificates. And this moreover even if the untrue statement is made in the application for the last granted certificate.

68 But, says Mr Brettler, if an assisted person fails to notify a change in his financial circumstances occurring after the grant of all his certificates he has not " in relation to any application for a certificate (whether for the same or different proceedings) made an untrue statement as to his financial resources or ... failed to disclose any material fact concerning them." So, he says, in the present case reg 78(1)(a) can have no application because (and this is the fact) none of the Committee's findings relate to non-disclosure at the time of any application by either Mr or Mrs Bateman for legal aid; the findings all relate to matters which it is alleged ought to have been notified at a time after all the certificates had been granted.

69 Mr Brettler says that, however unattractive the result may appear, there is no ambiguity in the language of reg 78(1)(a). Although he was unable to point to any other power in the Board to revoke a certificate in such circumstances he relied on reg 76 of the General Regulations as empowering the Board to discharge the certificate.

70 For his part Mr Ross-Munro supported Mr Brettler, though so far as I could detect without much enthusiasm. Indeed, he went so far as to observe that "it would be strange if there was no power to revoke where after a legal aid certificate was issued to a legally aided person he failed to disclose £1,000,000 that he had won in the Lottery." Quite so. In fact Mr Brettler's proposition has even more absurd consequences, some of which I pointed out during the course of argument.

71 Mr Harvie submits that Mr Brettler's argument is untenable. He mounts a comprehensive attack submitting that Mr Brettler's argument must fail, as a matter of both a literal, a purposive and a contextual construction, and as a matter of logic. I agree.

72 In particular Mr Harvie submits that:
« The wording of reg 78(1)(a) is clear. It is expressly stated that it does not matter whether the failure to disclose occurred "before or after the issue of the certificate". Accordingly, it is clearly envisaged that a failure to disclose can occur after a certificate has been issued. The words "in relation to any application for a certificate" have to be interpreted in that context.
« The purpose of reg 78(1)(a) is to allow the Board to police the provision of legal aid. Parliament has provided the Board with clear sanctions where assisted persons fail to be full and frank with the Board. If the argument contended for on behalf of Mr Bateman were accepted, there would be enormous loopholes in the statutory framework, which Parliament cannot have intended. Essentially, on that argument, once in receipt of legal aid, individuals would be at liberty to make untrue statements concerning their financial resources, and would be at liberty to refrain from disclosing material facts relating to their financial resources.
« Reg 78(1)(a) cannot be isolated from other provisions in the General Regulations, which clearly indicate that the Committee's interpretation is correct. Mr Harvie referred me to reg 66A(a) of the General Regulations, which provides that:
"The Area Director or the assessment officer may at any time after the grant of a certificate require the assisted person to ... provide further evidence of any information given in relation to his application for a certificate " (emphasis added).
This indicates that even after the grant of a certificate, information can be required in relation to the application. Mr Harvie also referred in this context to regs 11, 12 and 14 of the Assessment Regulations.
« As a matter of logic, the effect of this argument would be that no matter how significant the change in financial circumstances (eg. winning millions of pounds from the national lottery), the entitlement to legal aid would remain notwithstanding non-disclosure. This, said Mr Harvie, cannot possibly be right.
«
So, he says, reg 78(1)(a) was construed correctly by the Committee and accordingly the challenge on the construction point must fail.

73 I agree with Mr Harvie, in all essentials for precisely the reasons he has so cogently put forward and to which, at the end of the day, Mr Brettler, with all respect to him, simply had no effective answer. I note in passing that, as Mr Harvie pointed out, this was the view also taken by Collins J when, in refusing Mr and Mrs Bateman permission to apply for judicial review, he said: "The construction of Regulation 78 is clearly right."

74 Mr Brettler, again with only limited support from Mr Ross-Munro, next submitted that the Committee had misconstrued both reg 7A(1)(b) and, more importantly, reg 7A(1)(c) of the Assessment Regulations. So far as concerns reg 7A(1)(c) Mr Brettler submits that it applies to gifts and does not apply to loans. The ordinary meaning of the words used - "resources of another person ... made available" - is not, he says, apt to describe loans. Pointing to the power in the assessment officer to "treat all  or any part of" such resources as the resources of the legally aided litigant, he suggests that if an applicant for legal aid has received a bank loan, one would not say that the bank's resources have been made available to the applicant so that the assessment officer may treat the whole of the bank's resources as the applicant's.

75 With all respect to Mr Brettler this argument is quite hopeless. The loans to Mr and Mrs Bateman from their family and friends quite clearly come within the concept of "resources of another person". Mr Harvie submits, and I agree, that if the applicants' relatives and friends provide money to the applicants - and, I would add, whatever the precise legal label which attaches to the transaction - then as a matter of ordinary language this comes within the wording "any of the resources of another person ... have been made available to the person concerned". There is, in my judgment, no basis at all for the contention that reg 7A(1)(c) applies only to gifts and not to loans.

76 Mr Harvie further submits that in any event a series of loans can in principle be treated as income, if they are all from the same source, have an element of recurrence or regularity, are used to meet expenses that would normally be met from income, and if there is no evidence that the loans will or can be repaid in the immediate future. All of these features, he says, were present in this case. That may be so, but there is, as it seems to me, no need to go that far. Whether or not these monies were properly to be treated as income in the hands of Mr and Mrs Bateman within the normal meaning of that expression is, in the final analysis, neither here nor there. The question is whether or not the payments bring reg 7A(1)(c) into play.

77 In support of his contention that reg 7A(1)(c) applies, and that Mr and Mrs Bateman were under a duty to disclose the various loans, Mr Harvie relies on a number of additional matters, referring for this purpose to McCormick . In that case the alleged non-disclosure was of a bank loan of £7,500. Elias J upheld the committee's decision that the non-disclosure was material. At p 1808E he said:
"It seems to me that ... the information about the loan would indeed be required to work out the applicant's entitlement since it is part of the financial information from which his means are determined. The fact that it may not affect an entitlement already determined does not mean that it is irrelevant to the working out of the entitlement."

78 Elias J continued at p 1811G:
"In my opinion it is plain that the information about the loan was such that the applicant had reason to believe that it was capable of affecting either his eligibility or his contributions."
At p 1812A he said:
"However, whilst in the event the information withheld may have made no difference in fact, I do not believe that the applicant had reason to believe that it was not capable of making a difference. First, his counsel representing him before the committee accepted that it might possibly have affected the amount of any contributions the applicant would have to make. Second, the amount of the loan was significant in legal aid terms given that, certain exceptions apart, a person is only entitled to retain a small amount of capital if legal aid is to be awarded in full. Finally, the applicant has sworn an affidavit in these proceedings in which he said that he had passed information about the loan to his previous solicitor on the assumption that she would pass it on to the board if necessary. Plainly that indicates that he himself recognised that the information might be relevant for the board to know. Whilst his own perception is not strictly relevant to the objective question whether he did in fact have reason to believe that the information should be disclosed, it does strongly reinforce the common sense view that it should."
I respectfully agree with Elias J's approach.

79 As Mr Harvie points out, it is apparent from various of the documents to which I have already referred in paragraphs 13-26 above that both Mr and Mrs Bateman themselves regarded the loans from family and friends as income and/or resources, that Mrs Bateman at least accepted that the loans are relevant for purposes of determining the amount of contributions and that, not merely were the questions on the MEANS 1 forms undoubtedly wide enough to encompass the loans, so that the wording could not have left them in any doubt that the Board required them to disclose the loans in full, but they themselves recognised that they were supposed to disclose the loans.

80 So far as concerns Mr Brettler's argument based on his example of a bank loan that, it seems to me, is met by McCormick . It should also be noted that at p 1813D Elias J recorded, if only to reject, the submission that revocation was a disproportionately harsh sanction in a case where the applicant was no better off as a result of a bank loan, having simply replaced two creditors by one.

81 Finally, on this point I agree with Mr Harvie's submission that the question of whether and to what extent the loans would be, or indeed could properly be, taken into account by the assessment officer is an entirely different question to whether the loans should have been disclosed. Had the loans been fully disclosed, the assessment officer would have had to exercise his discretion under reg 7A(1) as to how the loans should be treated, ie, whether, and to what extent, they should be treated as forming disposable capital or disposable income and whether and to what extent, if at all, any other resources of the Batemans' friends or relatives should be treated as their resources. However, as the information had not been fully disclosed, the assessment officer did not have the opportunity to consider it. I agree with Mr Harvie that the fact that the assessment officer might have exercised his discretion in the Batemans' favour does not mean that they were under no duty to disclose the loans.

82 Mr Brettler, with Mr Ross-Munro's support, submits that the Committee fell into error in holding (in paragraph [6] of the Decision Letter) that reg 7A(1)(b) applied as well as reg 7A(1)(c). They submit that, as the Committee in fact recognised in paragraph [7] of the Decision Letter, the word "maintaining" when used in reg 7A(1)(b) refers to the financing of the proceedings and not to the maintenance in the general sense of the applicants. There is, they say, contradiction on the face of the Decision Letter.

83 Once it is appreciated that the phrase "person concerned" in reg 7A(1)(b) is a term of art, defined, as I have said, by reg 3(1), the meaning of reg 7A(1)(b) becomes quite clear. On its proper construction reg 7A(1)(b) applies when some other person is "maintaining ... in the proceedings" the "person concerned" - that is, maintaining, in what might be called the common lawyer's meaning of the word, the "person concerned" as that expression is defined in reg 3(1). Reg 7A(1)(b) does not apply merely because some other person is "maintaining the person" who is the "person concerned in the proceedings" - that is, maintaining in what might be thought of as the family lawyer's meaning of the word or, as Mr Ross-Munro put it, contributing to household or other expenses not connected with the actual legal proceedings. And as Mr Ross-Munro went on to point out, it is not disputed in this case that all the monies provided to Mr and Mrs Bateman by their relatives and friends was wholly spent on mortgage, council tax and living expenses. So, on their primary submission I agree with Mr Brettler and Mr Ross-Munro.

84 Mr Harvie sought to meet this by submitting, in reliance upon what was said in at least some of the letters to which I have referred in paragraph 26 above, that the loans were capable of falling within reg 7A(1)(b) if made by a third party in the hope that assets will result from the litigation. I am not at all sure that this is right. But it does not seem to me to matter. The fact is that, as I have found, the loans plainly did  fall within reg 7A(1)(c). Whether in addition they fell within reg 7A(1)(b) seems to me in these circumstances to be an entirely academic question which cannot have had any discernible impact on the Committee's decision. Even if there was on this point some confusion in the Committee's expressed reasoning (and I am not saying there was) it cannot sensibly be said to have vitiated either its reasoning in relation to reg 7A(1)(c) let alone in any wider respect.

85 These points of construction out of the way I turn to consider whether there was in this case an unjustifiable failure by each of Mr and Mrs Bateman to disclose material facts or, to put the point more correctly, whether it was legitimately open to the Committee to conclude, as it did, that there had been.

86 It will be recalled from paragraph 33 above that the Committee found there had been material non-disclosure by both Mr and Mrs Bateman in relation to (i) their ceasing to receive a passported benefit (paragraph [2] of the Decision Letter), (ii) the Scottish Provident Insurance Policy (paragraph [4]) and (iii) the loans from family and friends (paragraph [7]). Three questions accordingly arose for consideration by the Committee. First, were each of those matters "material facts" within the meaning of reg 78(1)(a)? Secondly, had there been a failure to disclose within the meaning of reg 78(1)(a)? Thirdly, had Mr and Mrs Bateman nonetheless used due care or diligence within the meaning of reg 78(2)?

87 I deal first with the question of materiality. I can do so shortly. Applying the test formulated by Elias J in McCormick there is in my judgment no doubt that each of the three matters in question was a material fact. It is self-evident that the existence of the Scottish Provident Insurance Policy was a material fact. So, for reasons I have already considered, was the existence of the various loans totalling £56,000 which the Batemans had received from their families and friends.

88 The only point which needs further consideration is Mr Brettler's submission that the cesser of the passported benefit was not a material fact. Put shortly he says that the effect on their financial resources of Mr and Mrs Bateman coming off benefit was to reduce their income from monthly benefit of £1,000 to Mr Bateman's monthly salary of only £333. How, he asks rhetorically, can this diminution in income be relied upon as a material fact concerning Mr Bateman's financial resources? It cannot be. A material fact must, he says, relate to the augmentation and not the decrease of the applicant's financial resources. Mr Harvie submits, correctly in my judgment, that the entire basis of this argument is fundamentally flawed. The material fact which required to be disclosed was not the amount of the Batemans' income, or the fact that the income had reduced. The material fact was that they were no longer in receipt of a passported benefit and accordingly no longer entitled to non-means tested legal aid but on the contrary subject to a means assessment of the entirety of their financial resources in order to determine whether or not their financial circumstances were such that they should receive means tested legal aid. In the light of the authorities to which I have referred above it is simply no answer to reg 78(1)(a) to show (even assuming one can) that if the full facts had been disclosed to the Board the applicant would still have met the financial eligibility criteria. In other words, as Mr Harvie says, the fact that the Batemans might still have been entitled to legal aid if their income was only £333 per month is irrelevant for the purposes of reg 78(1)(a). The cesser of the benefit was plainly in my judgment a material fact within the meaning of reg 78(1)(a).

89 I deal next with the question of failure to disclose. A lot of ingenuity has been applied in what in my judgment was a futile and doomed attempt to demonstrate that there had been no failure by the Batemans to disclose any of these material facts when there quite plainly had been. The key point is that, as Mr Harvie correctly put it, the Batemans' obligation was to disclose material facts immediately and voluntarily . That obligation derived both from the duty of utmost good faith they owed to the Board (see paragraphs 57-59 above) and from the imperative obligation under reg 11 of the Assessment Regulations, as explained by Elias J in McCormick , to "forthwith inform the Area Director of any change" in their financial circumstances. This obligation, as it seems to me, the Batemans singularly failed to perform. Be that as it may I have no doubt that the Committee was wholly justified in coming to that conclusion. The attempt by Mr Ross-Munro to characterise the case as one of "late disclosure" rather than "non-disclosure" is a piece of sophistry which goes nowhere to meeting the real gravamen of the Board's, as it seems to me entirely legitimate, complaints.

90 I do not propose to rehearse again in detail the facts as I have set them out in paragraphs 7-26 above. It suffices for present purposes if I draw attention to the following points:
(a) No  disclosure of the material facts was made until after the Board had written to Mr Bateman on 18 November 1998. Full disclosure of the facts in relation to the loans was not made until after the Board had sent Mrs Bateman a Notice to Show Cause on 10 February 1999.
(b) The crucial fact that the passported benefit had ceased on 18 September 1998 was not disclosed until 26 November 1998.
(c) Notwithstanding that the first MEANS 1 was submitted (by Mr Bateman) on 26 November 1998 the full facts in relation to the loans were provided in dribs and drabs. On 26 November 1998 Mr Bateman (with whom Mrs Bateman as I remarked in paragraph 14 above was content to associate herself) disclosed a total of £6,600 in loans from "relatives". That, to put the point plainly, was, as Mr Harvie fairly said, completely untrue. By 7 January 1999 the loans, still said by Mrs Bateman to be from "relatives", could perhaps as Mr Ross-Munro submitted have been deduced from the other information she supplied to have totalled at least £21,000 (Mr Brettler suggests the figure is £23,084). Even on that basis the information supplied was very significantly defective. By 3 February 1999 the admitted loans had grown to £40,000 - a significantly understated figure - but were still said by Mrs Bateman to have been provided by "relatives" and "families". Mr Bateman's schedule dated 4 February 1999 similarly referred only to a "family loan". Only on 10 March 1999 was disclosure made of the facts (i) that the loans totalled at least £56,000 and (ii) that there were loans from friends as well as from relatives.
(d) Notwithstanding that the first MEANS 1 had as I have said been submitted on 26 November 1998 the facts relating to the Scottish Provident insurance policy were not brought expressly to the attention of the Board until after the Board had itself raised the issue in June 1999. Even the bank statements which are relied on by the Batemans as containing the relevant information were not supplied to the Board until 7 January 1999.

91 In these circumstances it seems to me almost too obvious for elaboration that the full disclosure which it was the obligation of both Mr and Mrs Bateman to give was neither voluntary nor timeous. They volunteered nothing  until they were asked. Even then what they volunteered (if, indeed, that is the right word to use at all in circumstances where they were simply responding to inquiries from the Board) fell woefully short of anything that could possibly have been thought to be a full and frank disclosure of the true position in relation to the various loans. The Committee was fully justified in describing (in paragraph [7] of the Decision Letter) the disclosure in relation to the loans as "economical". The Committee might with complete justification have used a considerably blunter and more pointed expression. In the same way Ms Thompson was, in my judgment, entirely justified in describing (see paragraph 43 above) the disclosure as "late and piecemeal".

92 There is only one additional point which requires to be considered. If and insofar as it is being suggested that there was proper disclosure in relation to the Scottish Provident insurance policy by reason of the supply to the Board of bank statements containing the relevant information the point is, in my judgment, a bad one. As Mr Harvie correctly submitted, the fact that the annuity appeared in bank statements disclosed to the Board did not absolve Mr and Mrs Bateman from their duty to complete the MEANS 1 and other forms correctly. It cannot be the Board's task to root through bank statements merely to trace information which should have been disclosed on the appropriate form and in the appropriate place. It cannot be incumbent upon the Board to scrutinise bank statements, to identify each outgoing and incoming item of income, and to raise further enquiries of the applicant if necessary. Rather the burden is on the applicant to complete the forms fully and correctly and to disclose all relevant information. It is not for the Board to scrutinise the minutiae of supporting documentation to see whether it contains any information the applicant should have, but has not, disclosed in his MEANS 1 form. The burden is on the applicant to provide the information, not for the Board to search for it. Mr Harvie also points out, with justification, that it is not even as if Mr and Mrs Bateman intended to disclose the Scottish Provident receipts. Rather, their existence became apparent accidentally. That they had failed in their duty to address their minds to all aspects of their financial circumstances is shown by the admission that "they do not read their bank statements, except to look at the balance" (and in Mrs Bateman's case, apparently not even the latter).

93 In my judgment there is compelling force in Mr Harvie's pungently expressed observation that if the Batemans' argument was accepted, namely that it suffices as long as there is disclosure at some stage (as opposed to immediately), somehow accidentally (as opposed to consciously), somewhere in supporting documentation (as opposed to in the MEANS 1 forms themselves), and in response to queries (as opposed to voluntarily), then the effect would be that reg 78 could never bite. For no matter how late, how accidental, how inadequate, and how much in response to investigation the disclosure was provided, individuals could always say that they had disclosed after all. As he says, it is transparent that such an argument is untenable.

94 I deal next with the question of due diligence. I can do so very briefly. Despite forlorn attempts to suggest that the Committee's finding was open to challenge, at least in relation to the Scottish Provident receipts, the argument is hopeless. There was an abundance of material, much of which I have already summarised and analysed for other purposes, entitling the Committee to come to the conclusion that neither Mr nor Mrs Bateman had used due care or diligence. The argument to the contrary is wholly untenable.

95 Pausing there I am satisfied that the Committee was fully entitled to conclude as it did (1) that there had been a failure by both Mr and Mrs Bateman to disclose material facts within the meaning of reg 78(1)(a) in relation to (i) their ceasing to receive a passported benefit (paragraph [2] of the Decision Letter), (ii) the Scottish Provident Insurance Policy (paragraph [4]) and (iii) the loans from family and friends (paragraph [7]) and (2) that they had not used due care or diligence within the meaning of reg 78(2). I am satisfied that, thus far, there is nothing of substance in any of Mr Ross-Munro's and Mr Brettler's many arguments.

96 At this point it is convenient to return to the nature of the task that the Committee was embarked upon. All counsel were agreed that the proper approach for the Committee was that set out in paragraph 13.07/1 of the Board's Legal Aid Handbook 1998/99 . Thus there were four questions the Committee had to ask itself:
(i) Has the assisted person made an untrue statement or failed to disclose a material fact?
(ii) If so, has the assisted person used due care or diligence to avoid the untrue statement or non-disclosure?
(iii) If the assisted person has not used due care or diligence, should the legal aid certificate continue in force?
(iv) If the certificate will not continue should it be revoked or discharged?
The first two questions involve arriving at findings of fact. In the present case, as I have found, the Committee's findings of fact were properly adverse to Mr and Mrs Bateman. The last two questions involve the exercise of discretion.

97 Founding themselves on the Legal Aid Handbook Mr Ross-Munro and Mr Brettler correctly identify the matters to be considered by the Committee when exercising its discretion in relation to question (iii) as including
(a) The size and extent of the non-disclosure found.
(b) The effect (if any) of the non-disclosure on the assessment.
(c) Whether the non-disclosure was deliberate (dishonest) or not.
The Handbook indicates that, if the non-disclosure was significant and was more than a mere oversight the certificate should not normally continue in force.

98 When exercising its discretion in relation to question (iv) the Committee should, consistently with the Handbook and McCormick . have considered:
(d) The seriousness of the non-disclosure and the degree of culpability.
(e) The importance of the case to the individual.
(f) Whether the non-disclosure was deliberate and dishonest or innocent, albeit negligent. Where there has been either dishonesty or serious and substantial non-disclosure, revocation should be the normal result.
(g) Whether the applicant has personally benefited from the non-disclosure.
(h) Whether the non-disclosure would not have made any difference to the assessment, in which case revocation will not usually be appropriate except in the most serious of cases.

99 Putting the matter very shortly, Mr Ross-Munro and Mr Brettler make three complaints about how the Committee went about the exercise of its discretions. First, it is said, particularly by Mr Ross-Munro, that the Committee misunderstood and accordingly misdirected itself on the facts. Secondly, it is said that the Committee failed to take into account matters relevant to the exercise of its discretions. Thirdly, it is said that the Committee's decision to revoke (as opposed to discharge) the legal aid certificates, with all the disastrous consequences that revocation entailed, was Wednesbury  unreasonable. For reasons which I will explain briefly in due course there is in my judgment no merit at all in the last of these submissions. The other two do, however, cause me much more concern.

100 I deal first with the suggestion that the Committee misunderstood and accordingly misdirected itself on the facts. Mr Ross-Munro points to two alleged mistakes in the Decision Letter. The first, in paragraph [4], was the assertion that Mr and Mrs Bateman did not look at their bank accounts except to look at the balance when in fact, it would seem, Mrs Bateman's case is that she never looked at them at all. If this was a mistake on the part of the Committee it was one which tended if anything to favour Mrs Bateman. I cannot see how this mistake, if it was one, can possibly have affected the Committee's ultimate decision. There is, with respect to Mr Ross-Munro, nothing in this point. The other alleged mistake, in paragraph [7], is in the finding that "evidence of the extent of the loans did not come into the Board's possession until ... late February 1999". Putting the point at its lowest that finding is most unhappily phrased: evidence as to the extent of the loans was provided, piecemeal, from November 1998 onwards (see paragraph 90(c) above) albeit evidence of the full extent of the loans was not provided until March 1999.

101 The other mistakes relied on by Mr Ross-Munro are all to be found in paragraphs 41, 43, 45 and 46 of Ms Thompson's first witness statement: I have set out the relevant passages in paragraphs 41-43 above. Mr Ross-Munro's complaints are as follows:
(a) In paragraph 41.3 Ms Thompson said that in Mrs Bateman's MEANS 1 dated 7 January 1999 "no further detail was provided" in relation to the loans other than that set out on page 16. In fact, says Mr Ross-Munro, additional information was provided on pages 8-10 (see paragraphs 18 and 90(c) above). There is, it seems to me, some substance in this complaint.
(b) In paragraph 41.4 Ms Thompson said that in Mrs Bateman's MEANS 1 dated 3 February 1999 "no detail as to the amount of the loans was provided". In fact, says Mr Ross-Munro, information was provided on pages 8-10, on page 16 itself, and in the letter from Mrs Bateman, counter-signed by her father, dated 3 February 1999 (see paragraphs 21-23 above), including the information, albeit incomplete and inaccurate, that the loans totalled £40,000. There is, it seems to me, substance in this complaint also.
(c) In paragraph 41.5 Ms Thompson gives the impression that the true extent of the loans was only "obtained by the SIU" - ie, says Mr Ross-Munro, obtained by the SIU independently of the Batemans - when in fact it was communicated to the Board by the Batemans (see paragraphs 25-26 above). Standing alone this complaint, which savours somewhat of the semantic, would carry little weight.
(d) In paragraphs 43, 45.2 and 46 Ms Thompson asserted that the Batemans' disclosure was not made "timeously" and that it was "late and piecemeal" and "unreliable". There can be no quarrel with any of those descriptions. However Ms Thompson seems also to have thought that, even by the end of the process, the disclosure made by the Batemans was not "full" (paragraph 43) and was "incomplete" (paragraphs 45.2 and 46). She also asserted (paragraph 46) that "despite being given several chances ... to be open in relation to this information [scil the full picture of their resources] the [Batemans] did not provide it." If this really is what Ms Thompson thought there was, so far as I am aware, no basis for it at all. There was, so far as I am aware, absolutely no evidence to suggest - and certainly no clear finding by the Committee of - the existence of any relevant assets or financial resources other than those which had been uncovered, albeit belatedly, at the very latest by June 1999.
(e) Finally in paragraph 45.2 Ms Thompson asserted that "disclosure had only been made after an investigation was instigated by the SIU". That, again, would appear to be wrong (see paragraph 20 above).

102 Mr Ross-Munro submits that the cumulative effect of all these errors in the Decision Letter and in Ms Thompson's witness statement - the latter avowedly seeking to explain what she called "the grounds for the area committee's decision" - is such as to demonstrate a fatal level of factual misunderstanding sufficient of itself to vitiate the Committee's decision. That, as it seems to me, is a powerful argument. Mr Ross-Munro's complaints in relation to paragraphs 45 and 46 of Ms Thompson's witness statement are perhaps particularly significant for those of course are the paragraphs in which she sought to set out the Committee's reasons for having exercised its discretion as it did.

103 I turn now to the complaint that the Committee failed to take into account matters relevant to the exercise of its discretions. Although in detail their submissions differed to some extent, reflecting the slightly different positions of their respective clients, in large measure Mr Ross-Munro and Mr Brettler made common cause.

104 In relation to the exercise of the first discretion, that is as to whether the legal aid certificates should have been allowed to continue in force, notwithstanding the Batemans' non-disclosure of material facts, it is said that the Committee failed to consider, or, if it did, failed to have sufficient regard or attach sufficient weight to:
(i) the size and extent of the non-disclosure, in particular the modest amount of the Scottish Provident annuity - £56 pm;
(ii) the effect (if any) of the non-disclosure on the legal aid assessment, including the facts that neither the Scottish Provident receipts nor Mr Bateman's diminished income would, so it is said, impact on the Batemans' financial eligibility for legal aid; indeed Mr Ross-Munro relies upon what Ms Thompson said in paragraph 45.3 of her first witness statement (set out in paragraph 43 above) as showing that the Committee clearly thought this was irrelevant;
(iii) the fact that the non-disclosures were not found to have been deliberate and that details of the Scottish Provident receipts were to be found in the bank statements submitted to the Board.
There is, as it seems to me, no substance in the first of these complaints and little in the third. The second, however, is of more weight.

105 In relation to the exercise of the second discretion, that is as to whether the legal aid certificates should have been revoked or discharged, it is said that the Committee failed to consider, or, if it did, failed to have sufficient regard or attach sufficient weight to:
(i) the fact that there had been no dishonesty or serious and substantial non-disclosure;
(ii) whether the Batemans had personally benefited from the non-disclosure found: cf McCormick at p 1813G;
(iii) whether the non-disclosure (if any) would have made any difference to the assessment;
(iv) the precise financial effect and loss that would follow if the certificate was revoked, having regard in particular to the sums at stake in the litigation, the cost to Mr and Mrs Bateman of pursuing the litigation and the importance of the litigation to them.
There is, it seems to me, substance in at least the second and third of these complaints even taking into account, as I do, everything said by Ms Thompson in those passages in her evidence, which I have set out in paragraphs 40, 43 and 45 above, in which she sought to set out the Committee's reasons for having exercised its discretion as it did.

106 In addition to these specific complaints both Mr Ross-Munro and Mr Brettler have a number of more fundamental objections to the Committee's approach.

107 First, they say that the statement of the Committee's conclusions in paragraph [8] of the Decision Letter is on the face of it wholly inadequate in at least two respects. (i) The Committee failed to give separate consideration to the exercise of the two quite distinct discretions that it had to exercise. As Mr Brettler correctly points out, the Decision Letter does not even advert to the distinction between discharge and revocation; or the differences between them in terms of their consequences; or suggest that any independent consideration was given to the second discretion. Nor does it identify any specific matters said to justify a revocation (rather than a discharge). (ii) Mr and Mrs Bateman were entitled to have their appeals considered quite separately from each other. Save in the most formulaic terms there is nothing in paragraph [8] to show that the Committee did. Paragraph [8] of the Decision Letter, he says, even on the most generous reading fails to meet the criteria spelled out by Elias J in the passage in McCormick at p 1814 which I set out in paragraph 62 above.

108 Next, and referring to what Elias J said in McCormick in the passage at p 1813G which I set out in paragraph 61 above, he submits that if the Committee was minded to revoke the certificates but had not made a finding of deliberate concealment (and there is no such finding here), it should have identified the factors which in its view justify that step being taken. Here, he says, the Decision Letter contained no such justification. Indeed, he says, there is nothing in the Decision Letter to suggest that any consideration was given to the question of whether discharge or revocation was the appropriate sanction in the circumstances. What, he asks rhetorically, can be deduced from the Decision Letter as to the factors which the Committee took into account as justifying revocation rather than discharge? It is not satisfactory he says for the written reasons to be silent on such a material point and for the Committee then to seek to justify its decision in evidence after the grounds of attack have been stated. In any event, he says, Ms Thompson's evidence fails to make good the deficiencies in the Decision Letter.

109 Next, and referring to what Elias J said in McCormick  in the passage at p 1814F which I set out in paragraph 63 above, Mr Brettler complains that in relation to each matter in respect of which there was a finding of non-disclosure of a material fact by Mr Bateman, the criticism stated in the Decision Letter was only that he failed to exercise due care and diligence. There was no suggestion in the Decision Letter that Mr Bateman had dishonestly failed to disclose material facts concerning his financial resources in relation to any of these matters. Although there was reference to the Jerrom Associates document, which it was accepted did not reflect well on Mr Bateman, the Committee accepted that this document did not disclose any assets unknown to the Board. However in her second witness statement Ms Thompson, as I have said in paragraph 45 above, deposed that:
"in view of the Jerome Associates letter, we did consider that we had reason to suspect dishonesty with regard to his position."

110 This, says Mr Brettler, indicates an unsatisfactory and flawed approach by the Committee to the exercise of its discretion: (i) The Committee attached weight to a suspicion of dishonesty but failed to state this in the Decision Letter. The Committee's written reasons were therefore inadequate. This, he says, vitiates the decision. (ii) The first statement by the Committee that it suspected dishonest non-disclosure of material facts by Mr Bateman was made on 2 October 2000 in a witness statement made in response to the skeleton argument used on Mr Bateman's permission application which had stated in terms, correctly, that the Committee had not found dishonesty. This approach of supplementing the written reasons with a suggestion of material dishonesty made for the first time in evidence is, says Mr Brettler, flawed and unfair and inconsistent with the Board's duty to act fairly and abide by the principles of natural justice. Furthermore, he says, by reason of these matters, Mr Bateman was deprived of his entitlement to a fair hearing in the determination of his civil rights and obligations, contrary to Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. (iii) In any event it was, he says. wholly improper and/or an irrelevant consideration for the Committee to attach weight to a mere suspicion  of dishonesty. In this connection Mr Brettler relies upon what Elias J said in McCormick at p 1814F as showing that an indication that a decision may have been influenced by a suspicion (rather than a finding) of dishonesty is of itself sufficient to vitiate it.

111 Turning finally to the suggestion that the Committee's decision was Wednesbury  unreasonable Mr Ross-Munro and Mr Brettler submit that, this being a case in which the Committee did not find dishonesty and in which, as they would have it, there was no serious and substantial non-disclosure, and the case therefore not being one of the most serious, no reasonable area committee, correctly approaching the exercise of the second discretion, would have exercised it by revoking the certificates. No reasonable area committee, they say, correctly approaching the exercise of its discretion, could have found that revocation was the appropriate sanction in the circumstances of this case. Mr Ross-Munro goes further. He submits that no reasonable area committee, correctly approaching the exercise of its discretion, would have relied upon Mrs Bateman's actions as grounds for even discharging her certificates.

112 So far as concerns this last submission I have no hesitation in rejecting it. As Mr Harvie says, the threshold of perversity is a high one. In my judgment it is plainly not met in this case. An area committee properly directing itself in accordance with the law, having found the facts which the Committee in this case properly found, could properly in my judgment have concluded, in relation to both Mr Bateman and Mrs Bateman, not merely (i) that the various legal aid certificates should not continue in force but also (ii) that even if the case was not  one involving dishonesty or deliberate and deceitful concealment it nonetheless justified the revocation of the certificates. Such a decision might, as Collins J suggested, have been viewed as "harsh" but I cannot accept that it would have been unreasonable, irrational or perverse in the Wednesbury sense.

113 I return to the matters which do, as I have said, cause me concern.

114 Mr Harvie disputes that the Committee misdirected itself in any way. In response to what in my judgment were some of the least compelling of Mr Brettler's arguments, Mr Harvie submitted, and I entirely agree, that the Committee was fully entitled, as it did, first to make findings as to the non-disclosure in relation to each individual incident and then to exercise its discretion on the basis of those findings taken together and evaluating the overall picture . The Committee, he says, and I agree, was entitled to consider each individual failure (for example, the failure to disclose the Scottish Provident annuity) as part of a broader picture which, as Ms Thompson correctly put it, showed that Mr and Mrs Bateman had failed to make disclosure in a number of different respects which taken together the Committee was justified in concluding amounted to very significant and substantial non-disclosure. Moreover, he says, and I agree, the Committee was fully justified in treating the case as one in which both Mr Bateman and Mrs Bateman had, to use Ms Thompson's word, evinced a "cavalier" approach in the performance of the duties they owed the Board.

115 Mr Harvie goes on to submit that the Committee properly directed itself in all respects and that it did precisely what Elias J in McCormick  indicated it had to do. In particular, he says, it set out the individual factors which in its view justified the decision to revoke. As will be apparent by now I have considerable difficulties with that submission.

116 Exercising the purely supervisory role of judicial review I must resist the temptation to subvert the principle that it is not for me to substitute my own discretion for that of the Committee by a narrow textual analysis which enables me to claim that the Committee misdirected itself. My concern ought to be substance not semantics. The Decision Letter is to be read as a whole in a common sense way. It is not appropriate to focus on particular sentences and to subject them to the kind of legalistic scrutiny that might perhaps be appropriate in the case of a statutory instrument, a charter party or a trust deed. Recognising that the Committee was by virtue of reg 81(3) of the General Regulations under a statutory duty to give "the reasons for" its decision, its duty nonetheless was to give reasons for the decision reached, not to give reasons for every individual conclusion arrived at in the course of the decision. The reasons should contain sufficient to enable the reader to know what conclusions have been reached on the principal important issues. The reasons of a body such the Committee are to be read on the assumption that, unless it has demonstrated the contrary, the Committee knew how to perform its functions and which matters it should take into account.

117 Mr Harvie submitted that it was enough if the Committee gave reasons for what it was deciding to do, that is to revoke the certificates. There was, he said, no need for the Committee to give reasons for what it was not  doing, that is to discharge the certificates. Up to a point I can agree with this, but only up to a point. Given the two separate discretions that the Committee had to exercise (see paragraph 96 above), and given what was said by Elias J in the passage in McCormick which I set out in paragraph 61 above, it seems to me that the Committee, if it was to comply with its statutory duty under reg 81(3), had to do at least three things: (i) it had to give reasons which, implicitly even if not explicitly, recognised that it had two separate discretions to consider, (ii) it had to give reasons which, implicitly if not explicitly, explained why, if it decided on revocation, it had come to the conclusion that revocation was the appropriate sanction and why the lesser sanction of discharge was not adequate to meet the needs of the case and (iii) unless the case involved dishonesty or deliberate and deceitful concealment it had to identify the particular factors which justified a decision to revoke. In my judgment neither the Decision Letter nor Ms Thompson's subsequent explanations as set out in paragraphs 40, 43 and 45 above meet these requirements.

118 Not without misgivings I have to the conclusion that the Committee's decision cannot stand either in relation to Mr Bateman or in relation to his wife. I can summarise my reasons largely by reference to the preceding paragraphs of this judgment:
(1) The statement of the Committee's reasons as set out in the Decision Letter was defective in each of the respects referred to in paragraphs 107 and 108 above. These defects were not sufficiently cured by anything contained in Ms Thompson's subsequent evidence.
(2) On the contrary, Ms Thompson's evidence displays a number of errors (set out in paragraph 101 above) the cumulative effect of which is such as to demonstrate a level of apparent factual misunderstanding (i) sufficient to reduce very substantially the weight that can be placed upon her evidence insofar as it is relied upon to make good defects in the Decision Letter and (ii) sufficient of itself to vitiate the Committee's exercise of discretion.
(3) Even taking into account everything said by Ms Thompson in her evidence the Committee's exercise of discretion is vitiated by its failure to have proper, if indeed in some instances any, regard to the matters referred to in paragraphs 104(ii), 105(ii) and 105(iii) above. So far as concerns the matter referred to in paragraph 104(ii), the Committee was right to reject the Batemans' argument (that is, their argument that they were in any event financially eligible for legal aid) as an answer to the Board's complaint that they had been guilty of material disclosure. The Committee's error was in rejecting this as a relevant factor to be taken into account when considering how to exercise its discretion, not least bearing in mind that this was a factor specifically identified in the Legal Aid Handbook as being relevant in this context.
(4) The Committee was not entitled to have regard to a mere "suspicion" of dishonesty on Mr Bateman's part. Without necessarily accepting the remainder of Mr Brettler's complaints in this regard as summarised in paragraph 110 above (though I have to say that I regard the omission of this very serious allegation from the Decision Letter and its introduction for the first time in Ms Thompson's evidence as profoundly unsatisfactory) this factor alone, as it seems to me, suffices to vitiate the decision, at least in relation to Mr Bateman.

119 In coming to this conclusion I have, I hope, managed to avoid falling into the trap of subjecting the Committee's reasoning to an over-refined or merely semantic analysis. But looking to the substance of the Decision Letter and of Ms Thompson's evidence, and reading it all in what I hope is a sensible and common sense way, I am left at the end of the day with a very clear impression that the Committee erred significantly when exercising its discretions and in a manner which leaves me no alternative but to quash its decisions in relation to both Mr and Mrs Bateman.

120 As I have said I have arrived at this conclusion not without some misgivings. I should explain what they are. In the first place, and as I have already made clear in paragraph 112 above, an area committee properly directing itself in accordance with the law, having found the facts which the Committee in this case properly found, could properly in my judgment have concluded, in relation to both Mr Bateman and Mrs Bateman, not merely (i) that the various legal aid certificates should not continue in force but also (ii) that even if the case was not  one involving dishonesty or deliberate and deceitful concealment it nonetheless justified the revocation of the certificates - in other words, could  properly have come to the conclusions to which in fact the Committee came. Secondly, I am left with a very uncomfortable feeling that this Committee, if it had properly directed itself, and if it had set out its reasons in a more aptly drafted decision letter, would have come to precisely the same decision and, moreover, in circumstances where any attack in this court on its decision would inevitably have failed. Indeed, for this very reason Mr Harvie urged me, in the exercise of my discretion, not to quash the Committee's decisions even if I was persuaded, as I am, that there is vitiating error. I have given this submission careful consideration. But I am quite clear that I must firmly resist the temptation to accede to it, for in the final analysis I cannot be sufficiently sure that the Committee would in fact have come to the same decision. To refuse to quash the Committee's decision would be to deny Mr and Mrs Bateman the proper determination of their rights by the appropriately constituted adjudicating body to which the law entitles them. These, as I have already observed, are grave matters where the stakes are high. The Batemans are entitled to a proper redetermination by a committee which properly directs itself as, in my judgment, the Committee did not.

121 For these reasons I propose to quash the decisions of the Committee in relation to both Mr and Mrs Bateman. I will hear counsel further, if they wish, on the precise terms of the order.

122 Counsel are in fact agreed that the appropriate order should be to the effect that the decisions of the Committee should be quashed, that Mr and Mrs Bateman's appeals against the revocation of their legal aid certificates should be remitted to a differently constituted Funding Review Committee of the Board sitting as an Area Committee and that the remitted appeals should be heard separately unless both Mr and Mrs Bateman notify the Board that they wish the remitted appeals to be heard together. I shall make an order in those terms. It has been agreed that all questions of costs are reserved to a further hearing which in the event has been fixed for 28 September 2001.

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MR JUSTICE MUNBY : These are judicial review proceeds in the Administrative Court, in which previously legally-aided litigants, a Mr Bateman and his wife Mrs Bateman, sought judicial review of decisions of the Legal Services Commission, as it now is, revoking their legal aid certificates.
For the reasons set out in a judgment which I now hand down, copies of which have been sent in draft already to the parties, I have decided that I should quash the decisions of the Committee in relation to both Mr and Mrs Bateman. I propose to hear counsel further on the point now.
MR BOEDDINGHAMS : My Lord, I appear for Mr Bateman and my learned friend Mr Jaffey and Miss Ellins appear for Mrs Bateman and the Commission respectively.
(There was a short discussion re Robing)
My Lord, I understand that there is to be an argument on costs in this matter.
MR JUSTICE MUNBY : Yes, a message came through that counsel wished to address me on costs and since I imagine not all counsel who were originally directly involved are available today, the indication, with which I am entirely content, was that the question of costs should go over to some future occasion.
MR BOEDDINGHAMS : Yes, my Lord, I would be grateful. We have agreed among ourselves, subject to you, that that hearing should not take place earlier than 24th September which is when Mr Brettler, who did the hearing of Mr Bateman, will return again.
MR JUSTICE MUNBY : Yes. Is it known, and if it is, will there be any embarrassment if somebody could very briefly indicate to me what the issue in relation to costs is likely to be?
MISS ELLINS : I think, very briefly, there is going to be an argument about a spent costs order and some possibly more complex arguments.
MR JUSTICE MUNBY : Yes. In other words, arguments which obviously require the participation of those who argued the case.
MISS ELLINS : Absolutely.
MR JUSTICE MUNBY : I quite understand. Thank you.
MR BOEDDINGHAMS : My Lord, the time estimate for that is agreed at about an hour.
MR JUSTICE MUNBY : Yes.
MR BOEDDINGHAMS : My Lord, as for the rest of the formal order that has been agreed, subject to your Lordship, and those are orders that, first of all, the decision be quashed; secondly, that it be remitted to the Finance Committee, sorry, to the Funding Review Committee sitting as an area committee; and, thirdly, that that committee be differently constituted--
MR JUSTICE MUNBY : Well, I wondered about that.
MR BOEDDINGHAMS : --than the first time around.
MR JUSTICE MUNBY : I deliberately expressed no view about that issue in my judgment, save a deliberately rather Delphic reference in the last two lines of paragraph 120 of my judgment to redetermination by a committee. It did occur to me that there might be an issue as to that. But it is agreed it should be a different committee?
MR BOEDDINGHAMS : That is agreed, my Lord.
MR JUSTICE MUNBY : Yes, very well.
MR BOEDDINGHAMS : So that would be reflected in a formal order and I understand that my friend Mr Jaffey will prepare most of the order.
MR JUSTICE MUNBY : Yes. Well, there are, in one sense, two decisions because there are decisions in relation to both Mr and Mrs Bateman. There are, in fact, a large number of decisions, because each decision in turn relates to a number of legal aid certificates. So I think the order, for avoidance of doubt, should identify that what I am quashing are the decisions of the Committee, whenever it was, in relation to both Mr Bateman and Mrs Bateman and in relation to the various certificate numbers which ought to be listed in the order.
MR JAFFEY : My Lord, yes.
MR JUSTICE MUNBY : Then that the matter should go back for redetermination by the same Committee but differently constituted.
MISS ELLINS : It is technically the Funding Review Committee, I understand, sitting as an area committee.
MR JUSTICE MUNBY : Is that because procedurally it has changed?
MISS ELLINS : Exactly.
MR JUSTICE MUNBY : But, in substance, it is the current version of the same body, but a different group of people. Have people applied their minds to the question of whether the two cases should be heard together by that committee? I raise that point only because, although as matters developed Mrs Bateman's complaints canvassed, I think, in her evidence that the committee should not have dealt with the two cases together was not pursued, the complaint being at the end of the day that the Committee had failed to distinguish properly between the two cases when adjudication upon them, there had at an earlier stage, certainly on the evidence, been some measure of complaint by Mrs Bateman that the two appeals had been heard together. Now it seems to me that if that matter is agreed it should be spelt out in my order.
MR JAFFEY : My Lord, if that point----
MR JUSTICE MUNBY : If it is not agreed then I think I should rule upon it at some stage, so that my order can spell out quite precisely whether the new body is to hear both appeals together or separately.
MR JAFFEY : My Lord, can I suggest that that matter be left until the reserved hearing?
MR JUSTICE MUNBY : Of course, certainly.
MR JAFFEY : And I will put in a minute of order that that matter is specifically reserved over to that hearing.
MR JUSTICE MUNBY : Certainly.
MISS ELLINS : Can I give early indications without absolutely specific instructions that the matters would be heard separately. If these instructions were to be confirmed to myself and I could, of course, relay them to Mr Jaffey to be incorporated in the order.
MR JUSTICE MUNBY : Well, Miss Ellins, that is very helpful. I will, as it were, today -- I mean are you proposing that I should make an order, as it were, today, leaving certain matters over to be dealt with on a future occasion?
MR BOEDDINGHAMS : My Lord, I do not have any specific instructions on the matter and it may be that we can all agree and simply reflect it in the minute of order and if we cannot, can we leave it over to the hearing next time?
MR JUSTICE MUNBY : Certainly. Well, if you could prepare a minute of order which quashes the various decisions, sends them back for redetermination by the appropriate body, spells out that it is to be a differently constituted body and then either if it has been agreed that they should either be heard together or separately, spell that out, or if that has not been agreed then the minute should go on to say that there is, reserved to further argument on a future occasion, both the question of the joint and separate hearing of the appeals and all questions of costs. I think the minute better also provide that the reserved matters are to come back for a hearing in front of me on a date not before 24th September and to be arranged through the usual channels with a time estimate of one hour.
MR JAFFEY : Yes, my Lord.
MR JUSTICE MUNBY : Unless there is objection to this course I propose also to include a direction that the parties lodge skeleton arguments, brief skeleton arguments, in relation to the points of issue, 48 hours before the hearing.
MR JAFFEY : My Lord, my learned friend Miss Ellins indicated that the Legal Services Commission would wish to exchange sequential skeleton arguments, them going first, so it is clear precisely what orders they are seeking before Mr and Mrs Bateman have to response to that.
MR JUSTICE MUNBY : Yes. Does that need to go in the order?
MR JAFFEY : No, I do not think it does. I think the Legal Services Commission will----
MR JUSTICE MUNBY : Yes. That seems a quite sensible idea, as far as I am concerned if all the skeletons could be in 48 hours beforehand. The time estimate of one hour is realistic, is it?
MR JAFFEY : My Lord, I think so, yes.
MR JUSTICE MUNBY : Yes. How soon will people be in a position to let my clerk have details of availability?
MISS ELLINS : As far as I am concerned I have the details with me now, but I understand, my Lord, it also depends on your Lordship's diary.
MR JUSTICE MUNBY : Yes. I mean the problem is purely a logistic turf war problem. I am not sitting, strictly speaking, in the Administrative Court again until I think November. But obviously this matter should come on as quickly as possible. It will, therefore, have to eat into Family Division time and, therefore, the shorter the hearing can be the better. It may be to placate my Lords and Masters in the Family Division that I will put the case in at ten o'clock or quarter to ten in the morning, unless that is going to be considerably inconvenient. So I am not going to make any formal direction but could each of you, or rather could the clerks for each of those who will be appearing in front of me when the matter comes back, let my clerk know as soon as possible what the available dates are because obviously I want to deal with this matter as soon as possible. Mr Brettler is back -- I take it 24th September is when everybody is back? By then they are all back, are they?
MR BOEDDINGHAMS : Yes, my Lord, and his clerk obviously has his diary. I have copy of it here in fact.
MR JUSTICE MUNBY : Just so I can get some feel for this, there is also, of course, in addition to everything else, we obviously have to arrange for the Administrative Court associate to be here. Does it look likely that it will be possible for it to come back in the week of 24th September?
MR BOEDDINGHAMS : Yes, my Lord, from Mr Brettler's point of view, it does.
MR JUSTICE MUNBY : And if I can be so bold as to ask, who else is likely to appear at this hearing? Is Mr Harvie going to be here?
MISS ELLINS : Mr Harvie will be here.
MR JAFFEY : And Mr Ross-Munro will also be here. I will be able to get the details of his diary to your Lord's clerk today.
MR JUSTICE MUNBY : Yes. You do not happen to know when he is back, do you?
MR JAFFEY : I am afraid I do not.
MR JUSTICE MUNBY : No. If your clerk, if those clerks could let my clerk know later on today by fax and you have the fax number, it was on the draft judgment, what I would like to do, if this is possible, is to fit it in sometime in the week of 24th September. As I say, my inclination would be to put it in at 9.45 in the morning, 9.45 or ten o'clock in the morning so as to minimise disruption to my Family Division lists.
Is there anything else that needs to be dealt with today?
MR JAFFEY : No.
MR BOEDDINGHAMS : No, thank you.
MR JUSTICE MUNBY : Thank you all very much and if you can also, as soon as that minute is ready, if you could fax that over to the same number I would be very grateful, and as soon as may be we will get back to you with a date. My current thinking is the date should not be before 24th September. Thank you all very much.
Sorry, one final thing, Miss Ellins has let me have her notes on the typing errors in the draft judgment. I do not think I have yet had any comments either from Mr Ross-Munro or from Mr Brettler.
MR JAFFEY : My Lord, I apologise if you have not had it.
MR JUSTICE MUNBY : No, an apology is not called for. It is simply if I could have them as soon as possible because I come under enormous pressure to produce a judgment in definitive form at the earliest possible opportunity.
MR BOEDDINGHAMS : Mr Brettler says he has a nil return.
MR JUSTICE MUNBY : He has a nil return? Well, in that case if Mr Ross-Munro could get let me know as soon as possible whether he has a nil return or has any alterations to make I can embody them in the final judgment.
Thank you all very much indeed. If anybody wants copies of the judgments in either case there are a few copies here which the usher will be able to distribute. That said, I somewhat doubt that either judgment will be of any interest either to the legal fraternity or to the wider media, but I may be wrong.


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